Billabong shares up on restructuring amid takeover bid
Billabong shares have surged more than 60% as the company announced a restructuring plan after receiving a takeover bid from TPG Capital.
Its shares roses as high as A$2.93 at the Australia Securities Exchange, up from A$1.79.
Billabong will sell a stake in its Nixon brand, close unprofitable stores and cut jobs as part of the revamp.
TPG had offered 765m Australian dollars ($823m; $520m), or A$3 per share, to take over the firm.
Billabong confirmed the offer but said that it was subject to various conditions.
"In the absence of certainty, Billabong has proceeded with the partial sale of Nixon in order to stabilise its balance sheet," the company said.Debt issues
The firm, which is best know for making surf wear, has been struggling in recent times amid slowing global demand.
Last month, the company warned that its earnings for the first half of the year may dip by as much as 25%.
Billabong's debt has also been increasing, putting more pressure on its balance sheet.
The company said it will use the proceeds from the partial sale of Nixon, which will help it generate $A265.8m, to ease its debt burden.
"The board considers it needed a certain transaction to address Billabong's balance sheet issues, in particular to avoid any potential breach of its bank covenants," Billabong said.